Differences in Political and Culture Week 2

Globalization The world is moving away from self-contained national economies toward an interdependent, integrated global economic system Globalization refers to the shift toward a more integrated and interdependent world economy

Whay globalization? The decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II since 1950, average tariffs have fallen significantly and are now at 4 percent countries have opened their markets to FDI Technological change microprocessors and telecommunications the Internet and World Wide Web transportation technology

Political Economy Political economy of a nation - how the political, economic, and legal systems of a country are interdependent they interact and influence each other they affect the level of economic well-being in the nation

What is Political Economy Political system - the system of government in a nation Assessed according to the degree to which the country emphasizes collectivism as opposed to individualism the degree to which the country is democratic or totalitarian

Link between political and economy Political ideology and economic systems are connected countries that stress individual goals are likely to have market based economies in countries where state-ownership is common, collective goals are dominant

Political System Collectivism --> socialism Individualism Democracy Communism Social democrat Individualism Democracy Totalitarianism

Economic System Market economies Command economies Mixed economies

Legal System There are three types of legal systems Common law - based on tradition, precedent, and custom Civic law - based on detailed set of laws organized into codes Theocratic law - law is based on religious teachings

Culture Culture is a system of values and norms that are shared among a group of people and that when taken together constitute a design for living where values are abstract ideas about what a group believes to be good, right, and desirable norms are the social rules and guidelines that prescribe appropriate behavior in particular situations Society refers to a group of people who share a common set of values and norms

Determinants of Culture Determinants include religion political and economic philosophies education language social structure

Culture in Workplace Management processes and practices must be adapted to culturally-determined work-related values Geert Hofstede identified four dimensions of culture Power distance - how a society deals with the fact that people are unequal in physical and intellectual capabilities Individualism versus collectivism - the relationship between the individual and his fellows Uncertainty avoidance - the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity Masculinity versus femininity -the relationship between gender and work roles

What Do Cultural Differences Mean For Managers? It is important to develop cross-cultural literacy companies that are ill informed about the practices of another culture are unlikely to succeed in that culture managers must beware of ethnocentric behavior, or a belief in the superiority of one's own culture There is a connection between culture and national competitive advantage suggests which countries are likely to produce the most viable competitors has implications for the choice of countries in which to locate production facilities and do business

QUESTION AND ANSWER